17 MIJIL 967
(Cite as: 17 Mich. J. Int'l L. 967)
In the United States as throughout the world, trade policy seems to be evolving at breakneck speed today, goaded by both internal politics and an increasingly integrated world economy. Hidden in the controversy *968 and hysteria accompanying this transformation, [FN1] the "Rule of Law" (ROL) [FN2] has been growing, unheralded and unrecognized, within the international trading system. Recent innovations and developments in the field of international trade allow nations to negotiate binding laws governing conduct in trade, which extend to both nations and their sub-parts. Safeguards are in place to ensure that these laws, when domestically implemented, are as transparent as possible. Nations have also made efforts to coordinate the substance of their laws, in an attempt to harmonize the international body of trade law. Most impressively, a "court" now sits and adjudicates disputes over compliance with these laws, with the power of economic sanctions behind it.
A. The Rule of Law Holding Court
Ambivalence over the appropriate role of the dispute resolution system creates an environment conducive to a power-oriented framework. Under such conditions, enforcement of internationally adjudicated decisions requires resorting to the jurisdictional powers of the prevailing States. Such a "settlement of disputes [would be] dependent upon the status of the parties." [FN29]
The pre-WTO GATT system was not far removed from the above description. Any party could block the formation of the dispute resolution panel itself, or alternatively, prevent the adoption of the panel report, thus nullifying the effect of the whole proceeding. [FN30] Even without a *975 blockage of the panel report, little existed in the way of remedies. Retaliation was theoretically possible, but it required consensus approval of the contracting parties. [FN31] The parties viewed retaliation as a last resort, agreeing that dispute resolution in GATT should not be coercive but voluntary and diplomatic based on "the normative force of organized community condemnation." [FN32] Needless to say, this system hardly intruded upon traditional judicial functions, [FN33] and no major constitutional issues arose in this context. What aspects of legalism the mechanism did exhibit during the panel proceedings were usually swept over by the wave of power-oriented negotiations that always followed them. [FN34]
The United States' first major relinquishment of judicial authority in the field of international trade came in the Canada-U.S. Free Trade Agreement (CUSFTA). Canada and the United States established a binding binational panel review system to resolve disputes concerning final AD and CVD orders from the administering bodies of either country. [FN35] *976 These international panels were authorized to sit as reviewing bodies for domestic judicial and administrative decisions. The agreement boldly declared that each Party " shall replace" its judicial review of final AD and CVD determinations with binational panel reviews. [FN36] In another first development of its kind in the United States, the CUSFTA gave private parties the right to these reviews. [FN37] The agreement also provided for higher review of the panel decisions, although only in limited situations. Under the "extraordinary challenge procedure," each Party [FN38] could challenge the decision of a binational panel on the ground that: (i) a member (or members) of the panel was guilty of gross misconduct, bias, conflict of interest, etc.; (ii) the panel departed from a fundamental rule of procedure; (iii) the panel exceeded its authority or jurisdiction as defined by article 1904; or (iv) the existence of one or more of the above factors "materially affected" the panel's decision. [FN39]
In addition, the CUSFTA established a Bilateral Trade Commission to oversee CUSFTA implementation and to resolve certain interpretative disputes. [FN40] Parties could request consultations on any actual or proposed measure which could affect the Agreement. [FN41] If consultations failed, either Party could require the Commission to form a panel. [FN42] Most importantly, the complaining Party had the authority to retaliate if the violating Party did not come into compliance with the panel's report. [FN43]
The dispute resolution system proved successful. Both countries vigorously asserted their rights within it, and the panels responded with decisions of uniformly high quality. [FN44] Correspondingly, the parties in both government- to-government disputes and AD and CVD duty matters fully respected and implemented the panel decisions. [FN45]
*977 The essential elements of CUSFTA's Chapter 19 dispute resolution process for AD and CVD issues were adopted in the North American Free Trade Agreement (NAFTA). [FN46] Meanwhile, NAFTA Chapter 20 extends the inter-Party dispute resolution system to such nontraditional areas as intellectual property rights, standards (sanitary and phytosanitary, environmental, and health), and services. [FN47] It covers "all disputes between the Parties regarding the interpretation or application" of NAFTA and instances where "a Party considers that an actual or proposed measure of another Party is or would be inconsistent with the obligations of [this] Agreement or cause nullification or impairment" of the Agreement. [FN48]
Beyond these bread-and-butter dispute resolution provisions, NAFTA also contains some particularly interesting innovations. First, it institutes a new process designed to safeguard the panel review system. Chapter 19 provides for a three-member Special Committee which may be invoked if another Party's domestic law:
*978 (i) has prevented the establishment of a panel,
(ii) prevents a panel from rendering a final decision, or results in failure to provide for judicial or panel review, or
(iii) has prevented the implementation of a panel decision. [FN49] If the Special Committee makes an affirmative finding, the Parties will either negotiate a solution or the complaining Party may suspend the operation of the relevant chapter, subject in turn to retaliatory suspension by the offending Party. The existence of this novel (and comically circular) procedure evinces an intent to prevent domestic legislative deficiencies from intentionally or non-intentionally impeding the proper functioning of the panel system.
An obscure provision in NAFTA regarding the arbitration of investment disputes has the potential of becoming the most important, and contentious, element of the agreement. Chapter 11B provides for arbitration of investment disputes, including those of private investors. [FN50] In and of itself, that raises no eyebrows--U.S. Friendship, Commerce and Navigation Treaties and Bilateral Investment Treaties have done the same for years. What is amazing is the broad definition of "investment" and "investor," [FN51] which, taken with the extension of MFN and national treatment obligations to all measures relating to the "establishment, expansion, management, conduct, operation, and sale or other disposition of investments," [FN52] opens the range of possible disputes subject to arbitration far beyond traditional investment disputes and expropriation issues.
The success of the CUSFTA dispute resolution system (and the weakness of the old GATT model) prompted the United States to demand such a system for the GATT community. At the time of the launching of the Uruguay Round, the United States Trade Representative (USTR), Clayton Yeutter, announced that the GATT itself would collapse *979 unless its dispute settlement mechanisms were strengthened. [FN53] This was not an unexpected stance, given the fact that the United States was then the plaintiff in most of the cases in which it was involved. [FN54] However, the period following the commencement of the Uruguay Round Negotiations from the late 1980s to the early 1990s, saw an interesting turnaround--the United States became increasingly targeted as a defendant. Not surprisingly, U.S. support for the binding nature of the dispute resolution system diminished. [FN55] Once the United States "got the ball rolling" in the Uruguay Round, however, it found the momentum irreversible, and many other parties jumped onboard in the hope that the United States would rely on the new dispute resolution system instead of on its notorious unilateral measures. [FN56] The result of these efforts was the WTO--the crowning achievement of the Uruguay Round. [FN57]
When a dispute arises under the WTO system, and consultations do not produce a resolution within the standard sixty days, the complaining party may request a WTO panel. Operating under the new "integrated system," these panels will be able to address any dispute arising under GATT 1994 or its subsidiary agreements (unless another formal mechanism for resolution of that particular issue is otherwise provided for). They are to be comprised of three individuals with prior experience in international trade law and GATT (unless the parties request five). [FN58] The *980 panel reports will be automatically adopted, unless the Dipute Settlement Body (DSB) decides by consensus not to adopt the report (note that this is the exact opposite of the previous GATT system), or one of the parties formally announces its intention to appeal. [FN59]
Appeals of the panel reports are taken to the "Standing Appellate Body" (SAB), a standing body of seven persons, [FN60] which oversees the dispute resolution process. Characteristics of common law systems have strongly influenced the WTO's appellate review system. [FN61] Appeals will be limited to issues of law found in the panel reports. Although the decisions rendered in GATT dispute settlement procedures bind only the involved parties, there is a certain level of de facto stare decisis, as panels do rely heavily on past precedents. [FN62]
These panel and appellate proceedings under the WTO now progress along a concrete time table. [FN63] This represents a major improvement in the legalization of the GATT. Under the old system, stories abounded about the parties' use of delays to stall the formal dispute resolution processes until they became meaningless. The classic example is the United States' DISC (Domestic International Sales Corporation) export tax incentive dispute with the EC, in which the United States delayed resolution of the case for over a decade. [FN64]
*981 The changes outlined above drastically alter the conditions under which the GATT parties will negotiate to resolve disputes. First, the mandatory consultations now occur under the "shadow of a panel," whereas before, they were conducted under the shadow of panel veto. [FN65] While several of the Tokyo Round Agreements had recognized the right to a panel, the Uruguay Round for the first time explicitly establishes it under the integrated Article XXIII dispute settlement system. [FN66] The new provisions shift the burden, and instead of a consensus needed to establish a panel, a consensus is now needed not to establish one. This takes away the respondent's advantage under the previous system, in which the respondent could threaten to block the panel request, and thus influence the framing of the issues that eventually appeared before the panel.
Some would argue that this is precisely what happened in the CUSFTA. Indeed, the constitutionality of CUSFTA's binational panels was challenged in court, but the case was dismissed for lack of jurisdiction. [FN72] Well before that suit, however, observers were familiar with the constitutional issues raised by CUSFTA. At the time of its implementation, the chair of the House Judiciary subcommittee posed three issues for consideration:
(i) whether the bill violated Article III of the Constitution by failing to authorize judicial review;
(ii) whether the bill violated the Appointments Clause; and
(iii) whether the Due Process Clause of the Fifth Amendment required that some form of judicial review be available to claimants in these AD and CVD cases. [FN73] In response to these concerns, Congress provided in the implementing legislation that if the binational panel review system were found unconstitutional, *983 the President would have the authority to accept the decisions of the binational panels and the Extraordinary Challenge Committees on behalf of the United States. [FN74] President Reagan completed this "safety valve" by issuing Executive Order 12662, which stated that in the event of such a determination of unconstitutionality, he would accept in whole all the decisions of the binational panels. [FN75] These efforts represented an unprecedented cooperation between Congress and the President to shield an international agreement from constitutional challenge.
Many observers were understandably disturbed by this cooperative effort, claiming that neither the executive nor Congress had the authority to negotiate and agree to these binational panels. The customs bar was especially opposed to the binational panels taking over judicial review from the Court of International Trade (not in small part due to the perceived threat of loss of business). [FN76] They argued that AD and CVD duties were traditionally reviewed by Article III courts, and that the binational panel mechanism was therefore an unconstitutional creation. [FN77]
To address the Article III controversy, Congress wrote an expedited judicial review process into the CUSFTA Implementation Act for pure constitutional questions stemming from the AD and CVD proceedings. [FN79] The scope of review was limited to "facial constitutional challenges," and review of the binational panel decisions as such was barred. [FN80] Observers wondered whether this provided adequate appellate review for the binational panel mechanism. Some thought not, since there was no Article III review of the panels' legal and factual determinations. [FN81] The Supreme Court, however, has not required an extensive system of review. *984 Under Thomas v. Union Carbide Agricultural Products Co. [FN82] and Dames & Moore v. Regan, [FN83] the panels were probably proper, given the availability of review for constitutional challenges.
The panels also satisfied the alternative approach to assessing Article III validity that was laid out by the Court in CFTC v. Schor. [FN84] One factor in this test is an examination of the extent to which the tribunal encroaches upon traditional judicial functions and jurisdictions. [FN85] Given that Article III courts have traditionally reviewed AD and CVD cases, the CUSFTA (and now NAFTA) panels would probably fail this part of the test. [FN86]
The panels would fare better under the second factor, which asks whether "public rights" or "private rights" are involved. [FN87] "Public rights" are those created by the government, [FN88] while "private rights" involve the liability of one individual to another under the law as defined. [FN89] Schor allows "public rights" issues to be settled in non-Article III forums, explaining that questions of public rights, more easily than questions of private rights, can be relegated to administrative adjudication without encroaching on the powers of the judiciary. [FN90] The current understanding of trade rights (especially antidumping and countervailing duties) is that they involve "public rights," since they are benefits conferred by Congress (which Congress can also take away). [FN91]
*985 The panels arguably satisfy the third consideration, which evaluates the pragmatic concerns motivating congressional departure from Article III courts. [FN92] Congress has justified its prior departures from Article III on either of two grounds: reducing the backlog in Article III courts or creating Article I courts in highly specialized areas to develop expertise. However, nothing precludes the consideration of additional types of pragmatic concerns--such as congressional interest in having the CUSFTA finalized, in assessing the propriety of removing review from Article III courts. After all, Canada was not about to accept the Agreement without the binational panel review system. [FN93]
Another criticism of the CUSFTA and NAFTA panel system was that it conferred the authority to interpret and administer laws of the United States upon persons not appointed in conformity with the Appointments Clause. [FN94] Under Buckley v. Valeo, all persons "exercising significant authority pursuant to the laws of the United States" need to be appointed in accordance with the Appointments Clause. [FN95] Critics contended that none of the panel members (whether Canadian or American) would be officers under Article II, and yet they would be applying and administering the laws of the United States. [FN96] Professor William Davey, *986 however, has argued that the Appointments Clause is not implicated because the binational panels exercise their authority pursuant to the CUSFTA, and not the laws of the United States. [FN97] Moreover, when panels review U.S. cases, they arguably do not even apply U.S. law per se, since the CUSFTA explicitly incorporates U.S. AD and CVD laws for purposes of the review. [FN98] The best argument, though, may be that the panelists are actually "inferior officers" under the holding of Morrison v. Olson. [FN99] All four prongs of the Morrison test dictate this result: (i) the USTR has complete discretion on an annual basis to appoint, reappoint, or refuse to reappoint the U.S. panelists; (ii) the panelists perform limited duties; (iii) their jurisdiction is limited; and (iv) the positions are only temporary appointments (as the rosters are valid for one year). [FN100]
Along with the Article III and Appointments Clause challenges, the petitioners in National Council for Industrial Defense included a due process argument. [FN101] The issue here was whether the additional procedural protection which would be offered by judicial review (beyond constitutional review) is necessary to protect the litigant. Under the balancing test established by Mathews v. Eldridge, [FN102] the answer here is most likely no.
First, as established in the Article III analysis, the level of judicial review necessary is minimal, since AD and CVD duties involve public rights. Second, as in the Schor analysis, nothing precludes the consideration of the United States' interest in completing CUSFTA negotiations as part of the government interest prong of the Mathews analysis. Finally, being denied access to review of a trade conflict in a federal court is not, by itself, a denial of due process: it must be shown that the binational panels are incapable of affording due process in reviewing the *987 final orders. [FN103] The safeguards that were built into the CUSFTA undoubtedly would have precluded such a finding. The binational panels were required to (i) confine their reviews of the final orders of the Department of Commerce or International Trade Commission to the administrative record [FN104] and (ii) adhere to the standard of review set forth in the CUSFTA as well as to the general legal principles applicable to the U.S. Court of International Trade. [FN105] If either government felt that a binational panel strayed beyond these bounds, it had the right to invoke the extraordinary challenge procedures discussed earlier. [FN106] And if neither government initiated an extraordinary challenge procedure when clear evidence of abuse was furnished by a private party, a constitutional claim could have been made before a federal court.
FN31. John H. Jackson, Legal Problems of International Economic Relations 342- 43 (3rd ed. 1995).
FN32. Robert E. Hudec, GATT Dispute Settlement After the Tokyo Round: An Unfinished Business, 13 Cornell Int'l L.J. 145, 150 (1980).
FN33. Commentators have observed: "GATT is ... a long way from being a court, or at least from being accepted as one. Accordingly, a totally juristic approach to solving all of the problems governments take to GATT would likely be unworkable." David Palmeter & Gregory J. Spak, Resolving Antidumping and Countervailing Duty Disputes: Defining GATT's Role in an Era of Increasing Conflict, 24 Law & Pol'y Int'l Bus. 1145, 1151 (1993). Evidence, however, suggests that the system may have warranted some credit. According to Hudec, of the 139 complaints that he found to have been valid, conceded as valid, and settled or withdrawn despite their probable validity, the complaining party received full satisfaction in 60% of the cases and partial satisfaction in another 29%. Hudec, supra note 27, at 285.
FN34. A general dissatisfaction with GATT's dispute settlement mechanism provided one of the incentives for the launching of the Uruguay Round. Robert E. Hudec, Strengthening of Procedures for Settling Disputes, in Barry E. Carter & Phillip R. Trimble, International Law 425-26 (1995). Interestingly, one of the most exciting aspects of GATT's history in dispute settlement is a chapter that never happened--the aborted launching of the ITO. Many of the concerns and objectives for the Uruguay Round's Dispute Settlement Understanding were first expressed in conjunction with the ITO. The "Havana Charter for an International Trade Organization" included provisions for refraining from unilateral measures to resolve trade disputes, appellate review, and even a cross-institutional provision whereby the International Court of Justice would issue binding advisory opinions. Havana Charter for an International Trade in Final Act and Related Documents, United Nations Conference on Trade and Employment, Held in Havana, Cuba, U.N. Doc. E/Conf. 2/78 (1947), arts. 92-96. With the demise of the ITO, these ideas lay dormant for almost forty years, only truly awakening with the onset of the Uruguay Round negotiations.
FN35. CUSFTA, supra note 3, art. 1904. The agreement also provides for general dispute resolution administered under the Canada-U.S. Trade Commission. Id. at arts. 1801(1), 1806. Unlike the AD and CVD review panels, the findings of the Commission are merely declaratory, and not binding. The Canadians demanded this panel review system to encourage U.S. administrative authorities to follow more of a rule-oriented approach. Jackson, supra note 31, at 596-98.
FN36. CUSFTA, supra note 3, art. 1904:1. NAFTA, supra note 3, art. 1904(1) also repeats this language.
FN37. CUSFTA, supra note 3, art. 1904(5).
FN38. Only the national parties to the agreement could bring an appeal to the Extraordinary Challenge Committees, not the participants in the litigation itself.
FN39. CUSFTA, supra note 3, art. 1904(13), annex 1904.13.
FN40. CUSFTA, supra note 3, art. 1802.
FN41. Id. art. 1807.
FN43. Id. art. 1807(9).
FN44. Jonathan T. Fried, Two Paradigms for the Rule of International Trade Law, 20 Can.-U.S. L.J. 39, 51 (1994), citing Andreas Lowenfeld, Binational Dispute Settlement Under Chapter 19 of the Canada-United States Free Trade Agreement: An Interim Appraisal, 24 N.Y.U. J. Int'l L. & Pol. 269 (1991).
FN46. The NAFTA system replaces the CUSFTA system for the United States and Canada. Here is a list of some of the particulars of the NAFTA system:
*The panelists are drawn from an agreed-upon roster developed by the signatories. NAFTA, supra note 3, annex 1901(2). See also NAFTA: Rules of Procedure for Binational Panel Reviews, art. 1904 Panel Rules, 59 Fed. Reg. 8686 (1994). The roster was include sitting or retired judges to the fullest extent possible, unlike the CUSFTA panels, where most of them had been lawyers familiar with or practicing international trade law. NAFTA, supra note 3, Ch. 19, annex 1901.2 at 19-16 to 19-18. Unfortunately, no judges have, as yet, volunteered to sit on the panels.
*The NAFTA panels apply the same standards of review and general legal principles as the domestic system of the country in which the AD or CVD case originated. NAFTA, supra note 3, art. 1904, at 19-3.
*NAFTA also tightens the ethical provisions for panel members. It requires panel members to be "of good character, high standing and repute" to be objective, reliable, and of sound judgment and to have a general familiarity with international trade law. NAFTA, supra note 3, annex 1901.2. In a recent conversation with a NAFTA panelist, the author was assured that the Parties (at least the United States) were serious in applying these safeguards.
*CUSFTA's extraordinary challenge procedure has also been transferred to NAFTA. Id. art. 1904. See also Extraordinary Challenge Committee Rules, 59 Fed. Reg. 8702 (1994). NAFTA elaborates the grounds on which a complaint to the Extraordinary Challenge Committee (ECC) can be brought--if "the panel manifestly exceeded its powers, authority or jurisdiction set forth in this Article, for example by failing to apply the appropriate standard of review." Id. art. 1904(13)(a)(iii). The ECC has 90 days under NAFTA, instead of 30 days under the CUSFTA, to issue a decision.
Id. annex 1904(13)(2).
FN47. This chapter has been praised as "another step forward in the ongoing evolution of legal means for resolving trade disputes." Jeffrey P. Bialos & Deborah E. Siegel, Dispute Resolution Under the NAFTA: The Newer and Improved Model, 27 Int'l Law. 603 (1993).
FN48. NAFTA, supra note 3, art. 2004, at 20-3.
FN49. Id. art. 1905. The Special Committee is to be made up of three members which are to be selected from the same fifteen person roster as that used for the ECC, and comprised of judges or former judges of a federal judicial court of the United States, Canada, or Mexico. Id. art. 1905, at 19-8.
FN50. NAFTA, supra note 3, Chapter 11B.
FN51. NAFTA defines "investment" as including "an enterprise," while an "investor" is a national of a Party "that seeks to make, is making or has made an investment ...." Id. art. 1139.
FN52. Id. arts. 1102, 1003 (emphasis provided).
FN53. Felix Dearden, Yeutter: GATT Headed for Oblivion Unless ..., J. Com., Sept. 12, 1986, at 2A.
FN54. Palmeter & Spak, supra note 33, at 1148.
FN55. The stance of Congress also shifted from wanting swift and effective enforcement to opposing such enforcement, and Congress began to realize that, in Senator Bentsen's words, "the catch is this: If we want tough rules and a fast and effective dispute settlement system when we are plaintiffs in a case, we also have to live with the same rules when we are the defendants." Palmeter & Spak, supra note 33, at 1148-49, (citing 138 Cong. Rec. S1110, S1111 (daily ed. Feb. 6, 1992) (comments of Senator Bentsen on the Uruguay Round)).
FN56. Jackson, supra note 31, at 343.
FN57. U.S. acceptance of the WTO and what it stands for indicates an incredible psychological evolution. Just a few years ago, one commentator, responding to a call for a GATT "supercourt" (somewhat like the WTO Dispute Settlement Body), stated that such a court was unfeasible given (i) the political processes involved and (ii) the potential incompatibility of such an institution with embedded ideas of representative government. Phillip R. Trimble, International Trade and the "Rule of Law," 83 Mich. L. Rev. 1016, 1020 (1985). He felt that it was inconceivable that a President or the Congress would go along with such a proposal and concluded: "Even the active involvement of the United States in world affairs, and the dramatically increased national interdependence of the international economy, will alter this attitude only slowly, if at all." Id. at 1026. Alas, attitudes and practices may be progressing faster than many had anticipated.
FN58. Understanding on Rules and Procedures Governing the Settlement of Disputes, Apr. 15, 1994, art. 8(3), WTO Agreement, annex 2, reprinted in 33 I.L.M. 1226 [hereinafter DSU]. None of these panelists will be citizens of Members whose governments are parties (or third parties) to the dispute, unless the parties to the dispute consent. Id. art. 8(5).
FN59. Id. art. 16.4.
FN60. Seven individuals with demonstrated expertise in law will be appointed by the Dispute Settlement Board to serve for four-year terms. DSU, supra note 58, art. 17. They will serve in rotation, with three presiding over any given case, and the renewal terms will be staggered to assure some degree of continuity in the SAB. Members of the SAB are required to be completely independent and broadly representative of membership in the GATT.
FN61. In a move to inject more of a judicial character to the panels, Article 15 requires that they submit their legal analysis for comment. Article 18(1) of the DSU also provides that there are to be no ex parte communications between the panel or appellate body and the parties regarding a case in dispute.
FN62. John H. Jackson, Dispute Settlement Techniques Between Nations Concerning Economic Relations: With Special Emphasis on GATT, in Resolving Transnational Disputes Through International Arbitration 39, 52 (Thomas E. Carbonneau ed., 1984); Jackson, supra note 11, at 90 (1989) (stating that the diplomats and officials who participate in the GATT system are very influenced by "precedent," and that they often mention them in detail in GATT deliberations, and concluding that a common-law lawyer would find him or herself very much at home in the GATT legal proceeding); Ernst-Ulrich Petersmann, Strengthening the GATT Dispute Settlement System: On the Use of Arbitration in GATT, in 5 The New GATT Round of Multilateral Trade Negotiations: Legal and Economic Problems 323, 335 (Ernst-Ulrich Petersmann & Meinhard Hilf eds., 1988) (noting that even though GATT panels and GATT contracting parties are theoretically permitted to deviate from GATT interpretations applied in previously adopted panel reports, they have hardly ever done so).
FN63. DSU, supra note 58, app. 3 at para. 12, reprinted in 33 I.L.M. 1246.
FN64. The GATT proceeding began in 1973. The panel's report was not issued until 1976, and then the United States prevented adoption of the report until 1981. Even upon accepting the report, the United States took almost three years to enact legislation changing the DISC tax incentive. See, e.g., Erwin P. Eichmann, Procedural Aspects of GATT Dispute Settlement: Moving Toward Legalism 5 (1990); Robert E. Hudec, Legal Issues in US-EC Trade Policy: GATT Litigation 1960-1985, in Issues in US-EC Trade Relations 17 (R. Baldwin et al. eds., 1988).
FN65. J.H.H. Weiler, The Transformation of Europe, 100 Yale L.J. 2403, 2461- 64 (1991) (discussing the phenomena of the "shadow of the vote" versus the "shadow of the veto" in the EU).
FN66. See Eichmann, supra note 64, at 61-62; DSU, supra note 58, art. 6(1), reprinted in 33 I.L.M. 1230.
FN67. As of 1987, only five panel reports under Article XXIII:2 dispute settlement have not been adopted. Eichmann, supra note 64, at 46.
FN68. See, e.g., id. at 54.
FN69. 473 U.S. 614 (1985).
FN70. Id. at 629 (quoting The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 9 (1972)).
FN71. Palmeter & Spak, supra note 33, at 1164.
FN72. Nat'l Council for Indus. Defense, Inc. v. U.S., 827 F. Supp. 794 (D.D.C. 1993). Two U.S. associations filed suit arguing the unconstitutionality of Chapter 19 of the CUSFTA. Nat'l Council for Indus. Defense, Inc. v. U.S., No. 92-1898 (D.D.C. filed Aug. 9, 1992) (assigned to Judge Royce Lamberth). However, instead of filing in the D.C. Circuit, as was required by the Implementing Act (19 U.S.C. s 1516(a)(g)(4)(A)), the plaintiffs filed instead with the District Court for the District of Columbia, thus prompting dismissal. 827 F. Supp. at 796-97.
FN73. U.S.-Canada Free-Trade Agreement: Hearing Before the Subcomm. on Courts, Civil Liberties, and the Admin. of Justice of the House Comm. on the Judiciary, 100th Cong., 2d Sess. 2 (1988) (statement of Rep. Kastenmeier). Should any of these questions be answered in the affirmative, the implementing legislation contains special procedures that kick in. However, it is highly unlikely that these provisions will ever be applied.
FN74. 19 U.S.C. s 1516(a)(g)(7)(B) (1994). Moreover, no court would have the power or jurisdiction to review such action. Id.
FN75. 3 C.F.R. 624 (1989).
FN76. See Gordon A. Christensen & Kimberly Gambrel, Constitutionality of Binational Panel Review in Canada-U.S. Free Trade Agreement, 23 Int'l Law. 401, 414-15 (1989).
FN77. Id. at 414. See also Demetrios G. Metropoulos, Constitutional Dimensions of the North American Free Trade Agreement, 27 Cornell Int'l L.J. 141 (1994) (arguing the NAFTA's AD and CVD panels violate Article III, but advocating the amendment of Article III to allow for such transnational panels).
FN78. Much of the following discussion is taken from Christensen & Gambrel, supra note 76.
FN79. 19 U.S.C. s 1516(a)(g)(4)(B) (1994).
FN80. 19 U.S.C. s 1516(a)(g)(4)(G) (1994).
FN81. See, Richard B. Saphire & Michael E. Solimine, Shoring Up Article III: Legislative Court Doctrine in the Post CFTC v. Schor Era, 68 B.U.L. Rev. 85, 139 (1988).
FN82. 473 U.S. 568, 592 (1984) (noting that because review of constitutional error was preserved by a statute installing an arbitration system, Article III was not violated).
FN83. 453 U.S. 654 (1981). Even though the Court found no explicit statutory authorization for the President's suspension of judicial proceedings pending against Iran and its state enterprises, it did hold that Congress had implicitly authorized the formation of the Iran-U.S. Claims Tribunal via both emergency legislation and Congress' long-standing acquiescence to the settlement of claims against foreign governments and nations via executive agreement. Id. at 678-82. The Court also concluded that the adjudication by the international tribunal did not totally divest U.S. courts of jurisdiction-- constitutional claims for the taking of property, if left unsatisfied by the tribunal, could be resurrected in U.S. courts. Id. at 684-85; see Christensen & Gambrel, supra note 76, at 415-16.
FN84. 478 U.S. 833 (1986).
FN85. Id. at 851-52.
FN86. Due to the relatively short history of international trade adjudication, it is not clear whether it can be seen as "traditional."
FN87. Id. at 853-54.
FN88. See Crowell v. Benson, 285 U.S. 22, 50-51 (1932); Northern Pipeline Constr. Co. v. Marathon Pipe Line Co., 458 U.S. 50, 67-70 (1982).
FN89. Crowell, 285 U.S. at 51.
FN90. 478 U.S. at 853-54.
FN91. See Ex parte Bakelite Corp., 279 U.S. 438 (1929) (holding that trade suits are public rights); Northern Pipeline Constr. Co. v. Marathon Pipe Line Co., 458 U.S. 50 (1982) (suggesting that international trade cases are often "public rights" controversies); see also H.R. Rep. No. 816, 100th Cong., 2d Sess., pt. 4, at 7 (1988) (noting that antidumping and countervailing duties are a benefit bestowed on U.S. businesses by Congress, and therefore Congress can properly limit judicial review of such benefits); Christensen & Gambrel, supra note 76, at 418 ("[t]he correction of market distortions for the broader purpose of greater wealth and economic integration and the adjustments necessary to avoid unfair competition are public problems ill-suited for traditional adjudication.")
FN92. Schor, 478 U.S. at 851. One may note that the inclusion of pragmatic concerns as part of this analysis indicates that Justice White's dissent in Northern Pipeline Construction Co., in which he argued that "Article III is not to be read out of the Constitution ... [but rather that] it should be read as expressing one value that must be balanced against competing constitutional values and legislative responsibilities" eventually won out. Northern Pipeline, 458 U.S. 50 at 113.
FN93. Michael Wilson, Canada's Minister of International Trade, in a speech in Ottawa on July 23, 1992, stated that the eleventh-hour U.S. agreement to the binational panel review of anitdumping and countervailing duty determinations saved CUSFTA, as cited in Michael H. Greenberg, Chapter 19 of the U.S.-Canada Free Trade Agreement and the North American Free Trade Agreement: Implications for the Court of International Trade, 25 Law & Pol'y Int'l Bus. 37, n.7 (1993).
FN94. U.S. Const., art. II, s 2.
FN95. 424 U.S. 1, 126 (1976); see also Bowsher v. Synar, 478 U.S. 714 (1986). Some have suggested that U.S. panelists qualify as "inferior officers" under the Appointments Clause. This is probably not true, given the authority of the binational panel members. Note also that in WTO panel cases in which the United States is a party, none of the panel members will be the U.S. appointees, unless expressly agreed upon by the parties.
FN96. See Alan B. Morrison, Appointments Clause Problems in the Dispute Resolution Provisions of the United States-Canada Free Trade Agreement, 49 Wash. & Lee L. Rev. 1299 (1992). See also Nat'l Council for Indus. Defense, Inc. v. U.S., 827 F. Supp 794 (D.D.C. 1993).
FN97. William J. Davey, The Appointments Clause and International Dispute Settlement Mechanisms: A False Conflict 49 Wash. & Lee L. Rev. 1315, 1316- 17 (1992). "It is the [CUS]FTA, and not U.S. law, that provides when and how panels are to be established, what their functions are, what standard of review they are to apply, the time limits within which they are to complete their tasks and so on." Id.
FN98. Id. at 1318.
FN99. 487 U.S. 654 (1988).
FN100. See Davey, supra note 97, at 1320-21.
FN101. See Nat'l Council for Indus. Defense, Inc. v. U.S., 827 F. Supp. 794 (D.D.C. 1993).
FN102. 424 U.S. 319 (1976). The Mathews test requires consideration of three factors: (1) the private interest that will be affected; (2) the risk of an erroneous deprivation, and probable value, if any, of additional procedural safeguards; and (3) the Government's interest, including the fiscal and administrative burdens. Id.
FN104. CUSFTA, supra note 3, art. 1904(2).
FN105. Id. art. 1904(3); CUSFTA Implementation Act, supra note 3, s 401a(b)(1)(A) and (B).
FN106. CUSFTA, supra note 3, art. 1904(13).